The rise of data and digitisation has changed the face of finance in Africa. A digital revolution has occurred across numerous industries as a result of the widespread use of smartphones and internet connectivity. The fusion of finance and technology has increased financial inclusion across the continent for both individuals and companies. The amount of financial transactions is increasing, which emphasizes the need for digital identity to support know-your-customer (KYC) checks and fraud protection for firms.
Additionally, criminals frequently try to access regulated financial services illegally by using stolen or fake national IDs. This led to the widespread adoption of biometrics for reliable identity verification as it is no longer adequate to conduct a thorough KYC process just through document collecting.
Governments all throughout the continent are prioritizing the consolidation of national identity databases and identification cards as government services are digitized.
In comparison to the second half of 2022, there has been a noticeable improvement in the uptime of national ID databases throughout Africa, according to the Smile Identity H1 KYC report.
For accessing vital government services like social assistance programs and tax payments, as well as for getting practical IDs like passports or driver’s licenses, digital identity has become necessary.
You can now verify anyone’s identification anywhere in Nigeria thanks to digital ID verification, according to Esigie Aguele, co-founder and CEO of VerifyMe Nigeria, who spoke on Friday, September 15 at the 8th edition of the Inside identification Series by QoreID in collaboration with TechCabal. The protection of individual sovereignty over data and personal identities has become non-negotiable as we work toward digital transformation and financial inclusion, despite this appreciable improvement. The stories of privacy violations and data misuse highlight the necessity for strict laws, moral behavior, and informed consent procedures that put each person’s rights and privacy first.
To secure user data, establish transparency, and hold companies accountable for data handling methods, nations including Kenya, Nigeria, Uganda and South Africa have passed data protection legislation influenced by the EU’s General Data Protection Regulation (GDPR). Several other African nations have likewise combined their existing legislation to improve their legal and regulatory framework for data protection.
But the fragmented regulatory environment in Africa still needs to be addressed, and this calls for a coordinated strategy that respects each country’s sovereignty while fostering regional cooperation. Governments, financial institutions, technology providers, and, most importantly, the people whose lives will be influenced by these innovations, must all actively participate and engage in discourse in order to achieve this balance.
“When it comes to regulations regarding compliance and data sharing, Africa needs to operate like a country to integrate data protection requirements or laws that are regional in scope,” says Saruni Maina, associate VP of the Stablecoins division at Flutterwave.
To achieve a harmonious balance, policies must be developed that respect the distinctive identities and conditions of Africa while encouraging cross-border cooperation to improve financial inclusion.
Promoting digital literacy and educating people about the benefits and potential risks of sharing their data are two additional crucial aspects of this conversation. Citizens who are well-informed and empowered can make thoughtful decisions about their data and how it is used.
Additionally, in order to foster confidence among all stakeholders, transparency in data practices and simple permission processes are crucial.
Building trust and fostering active participation from the public both rely heavily on transparency. People must be made aware of the benefits of sharing their data and taking part in reliable ID verification procedures. By ensuring comprehension and providing simple consent processes, people are better equipped to decide how their data will be shared and how their identity will be verified. Ilamosi Ekenimoh, a data protection specialist, holds the following opinion: “Companies and regulators need to be more transparent. In order for people to trust you with their information, they must understand how it will be used.
In a world that is becoming more and more digital, the value of a safe and trustworthy digital identity system cannot be emphasized. These advancements must be balanced with the need to protect personal information, though. Esigie suggests that in order to give innovators a framework to build technologies on, the government needs to hold non-technical discussions.
